Italy Fines AI Chatbot Maker Replika 5 Million Euros For Data Protection Violation

Italy’s data protection authority has fined Replika’s parent company, Luka Inc., 5 million euros—approximately 5.64 million dollars—for failing to comply with regulations designed to protect users’ data. The authorities cited concerns about the technology’s potential risks to children and the company’s lack of a sufficient legal basis for processing the personal data of Italian users.

According to Reuters, the privacy watchdog Garante announced the decision on Monday, stating that the chatbot platform did not implement an age verification system to prevent children from sharing or accessing sensitive content. As a result, Luka Inc. was fined for these violations.

Replika offers users customizable avatars that can engage in conversations—via chat and voice—to create “virtual friends.” A few months ago, a woman named Sarah Kay reported developing an emotional connection with one of Replika’s chatbots.

The legal battle between Italian authorities and Replika has been unfolding for several years. In 2023, Italy’s data protection agency banned Replika from processing the personal data of Italian citizens, citing the potential risks the technology poses to children.

For nearly two years, Italian authorities have conducted an ongoing investigation and concluded that the AI company lacks a legal basis for processing the data of Italian users.

The data protection agency is also conducting a separate investigation to determine whether Replika complies with European Union policies and legal frameworks, with a particular focus on how the AI’s language model is trained.

The European Union’s Artificial Intelligence Act (AI Act) came into force recently to ensure that AI technology in the region is safe, trustworthy, and respects human rights.

Replika has not issued any comments or official statements regarding the Italian fine. Luka Inc. is not the only American AI company facing legal action from the Italian government—OpenAI was briefly banned and is also facing a 15 million euro fine, as Italy’s data protection authority claims the company violated EU privacy regulations.